|Bid||3.20 x 0|
|Ask||3.21 x 0|
|Day's range||3.17 - 3.28|
|52-week range||2.50 - 4.03|
|PE ratio (TTM)||14.75|
|Earnings date||14 Feb. 2018 - 19 Feb. 2018|
|Forward dividend & yield||0.16 (4.66%)|
|1y target est||2.59|
Have Markets Been Harsh on Alcoa This Year? In this article, we’ll take a look at the major risks facing Alcoa (AA) and other aluminum producers this year. As President Donald Trump looks inclined to impose tariffs on aluminum imports, we could see an increase in US aluminum production.
As we discussed in the preceding part of this series, US aluminum production has been stagnant at best, despite the nearly 50% rise in aluminum prices when compared with the 1Q16 lows. US aluminum production has been in a falling trend for quite some time now, and current production levels are hovering near multiyear lows. In this article, we’ll see why US aluminum production doesn’t look to be coming back online in a big way, despite higher aluminum prices.
In this article, we’ll see how markets are valuing Alcoa (AA). Specifically, we’ll look at the forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple, which is the preferred valuation metric for aluminum producers. Alcoa is valued at an enterprise value of 4.5x its 2018 consensus EBITDA and at 4.8x its consensus 2019 EBITDA.
Alcoa (AA) expects global aluminum demand to exceed supply in 2018 on China’s supply-side reforms. Notably, China has been curtailing its polluting industrial capacity in a bid to control its rising smog levels during the winter months.
In this part, we’ll see what Alcoa’s (AA) management had to say about aluminum’s demand-supply equation during its 4Q17 earnings call. First, let’s see what Alcoa had to say about the 2017 market balance. According to Alcoa, global bauxite and alumina markets (AWC) were balanced in 2017.
Alcoa (AA) reported its 4Q17 earnings on January 17, 2018, after the markets closed. The company posted an adjusted EPS (earnings per share) of $1.04 in 4Q17. Alcoa’s 4Q17 earnings fell short of analysts’ top line and bottom line estimates.
China is curtailing its polluting steel and aluminum capacity in a bid to address rising pollution levels. China exported 440,000 metric tons of unwrought aluminum last month—a YoY (year-over-year) increase of 12.8%. Last year, China’s aluminum exports rose 4.5%—compared to 2016.
Alcoa (AA), the leading US-based aluminum producer, is expected to release its 4Q17 earnings on January 17 after the markets close. In this final part of our series, we’ll see how analysts are rating the stock ahead of the 4Q17 earnings release. According to consensus estimates compiled by Thomson Reuters, Alcoa carries a mean one-year price target of $56, which represents a 0.3% downside over its closing price on January 10.
In this part of our series, we’ll see how markets are valuing Alcoa (AA). Specifically, we’ll look at the forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple, which is the preferred valuation metric for metal and mining stocks. Alcoa is trading at 5.2x its 2018 consensus EBITDA and at 5.4x its consensus 2019 EBITDA.
In this article, we’ll see what the market would like to hear on Alcoa’s 4Q17 earnings call. For metal and mining companies (RIO)(AWC) like Century Aluminum (CENX) and South32 (S32), the macro environment—which includes metal and raw material prices—is equally if not more important than company-specific factors. Speaking of aluminum, we’ve seen that prices are sensitive to China’s demand-supply dynamics.